NEWS

Australia Is Ripping Off Foreign Workers At A Staggering Rate

1 in 3 international students and backpackers are paid about half the legal minimum wage.

21/11/2017 7:00 PM AEDT | Updated 21/11/2017 7:24 PM AEDT
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International students and backpackers encounter conditions that may constitute criminal forced labour.

At least a third of backpackers as well as international students are regularly being ripped off by their bosses, with workplace exploitation of foreign guest workers in Australia both "endemic and severe," a new study has found.

One in three international students and backpackers are paid about half the legal minimum wage, according to the new report, Wage Theft in Australia, a study of temporary migrants' work and conditions in Australia.

The report -- by UTS and UNSW -- draws on survey responses from 4,322 temporary migrants from 107 countries in all states and territories, and presents what the authors say is a bleak but much-needed national picture of the extent of wage theft among international students and backpackers in Australia.

Key points:

  • A quarter of all international students earn $12 per hour or less and 43% earn $15 or less in their lowest paid job.
  • A third of backpackers earn $12 per hour or less and almost half earn $15 or less in their lowest paid job.
  • Workers from Asian countries including China, Taiwan and Vietnam receive lower wage rates than those from North America, Ireland and the UK. Chinese workers are also more likely to be paid in cash.

It also shows it varies across different nationalities, visas and industries, say authors Laurie Berg, a senior law lecturer at UTS, and Bassina Farbenblum, a senior law lecturer at UNSW Sydney.

Farbenblum said the study dispels the myth that underpayment occurs simply because temporary migrants don't know the minimum wage.

"We found the overwhelming majority of international students and backpackers are aware they are being underpaid. However, they believe few people on their visa expect to receive the legal minimum wage," Farbenblum said in a statement.

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State/territory in which participants worked in their lowest paid job

Wage theft has been on the national rader since the 7-Eleven scandal broke last year. The convenience-store chain at one point faced $110 million worth of claims by 2,832 workers who were underpaid under its franchise system.

Similar scandals hit pizza chains Dominos and Pizza Hut.

In September the Federal Government passed the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, aimed at protecting workers from unscrupulous employers by boosting fines for serious breaches of workplace laws and catch employers who force staff to pay back their wages in cash.

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Young woman checking her train in time board

The joint UTS and UNSW study found 86 percent of international students and backpackers earning up to $15 per hour believe that many, most or all other people on their visa are paid less than the basic national minimum wage.

It's Not Just The Fruit Picking Trade

Co-author Berg said wage theft is not confined to fruit and vegetable picking or convenience stores, nor is it confined to any nationalities.

"A fifth of every nationality was paid around half the legal minimum wage. For almost 40 percent of students and backpackers, their lowest paid job was in a cafe, restaurant or takeaway," Berg said.

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The study also shows international students and backpackers encounter conditions that may constitute criminal forced labour.

In 91 cases, respondents had had their passports confiscated by employers and 173 respondents were required to pay upfront "deposits" of up to $1000 to secure a job in Australia.

The report showed 112 respondents had been asked to pay money back to their employer in cash after receiving their wages.

About the survey:

  • Anonymous, online survey of 4,322 people who had worked in Australia on a temporary visa.
  • Available in 12 languages as well as English.
  • Focused on participants' lowest paid job in Australia.
  • 2,392 respondents were international students; 1,705 were enrolled at a university and 523 at a vocational or English-language college.
  • 1,440 respondents were backpackers (Working Holiday Makers).
  • The remainder worked in Australia on other temporary visas, including tourists.

The study also found 44 percent of overseas workers are paid in cash, including two in three waiters, kitchen-hands and food servers.

Half never or rarely receive a payslip.

"It provides compelling evidence for expanded services that respond to temporary migrants' experiences, as shared directly by them," Farbenblum said.

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